Chinese Banks Commit to Support for Real Estate Market Following Evergrande Crisis

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A slew of Chinese banks have come out with public statements since the start of November reiterating their support for efforts by regulators to contain the impact of the Evergrande Group debt crisis on China’s real estate market.

These statements from leading Chinese lenders include:

  • Industrial Bank Co., Ltd. announcing on 9 November that it would “comprehensively strengthen project management,” as well as “cooperate with local governments to guarantee the delivery of apartments.”
  • Bank of China announcing on 11 November that it would “continue to thoroughly implement the spirit of the national adjustment and control policy that houses are for occupation and not speculation; raise the frequency of risk monitoring and control, and maintain the stability of real estate sector asset quality.”
  • China Merchants Bank announcing on 12 November that it would “continue to support normal and rational real estate financing demand” in accordance with the overall position that “houses are for occupation and not speculation,” as well as “maintain the lawful rights and interests of residential housing consumers.”
  • China CITIC Bank announcing on 15 November that it would “effectively satisfy the rational demand for funds from real estate clients,” as well as “ensure that the stability of real estate loan quality is stable, and actively cooperate with all parties to jointly uphold the healthy and stable development of the real estate market.”
  • Postal Savings Bank of China announcing on 19 November that it would “undertake loan examination, approval and reviews in strict accordance with application procedures and related requirements for borrowers of real estate loans,” as well as “continually uphold the principle that houses are for occupation, not speculation.”
  • Bank of Communications announcing on 19 November that it would “actively satisfy the rational demand for funds of the real estate market,” in accordance with the goals of “stabilising land prices, stabilising housing prices and stabilising expectations.”
  • China Merchants Bank announcing on 22 November that it would “continue to support normal and rational real estate financing demand,” and implement national policy for the real estate sector in accordance with the overall position that “houses are for occupation and not speculation.”
  • Bank of Ningbo announcing on 22 November that it would “pragmatically protect the rational credit demand for personal homes under the leadership of the financial regulatory authorities.”

The China Banking and Insurance Regulatory Commission (CBIRC) recently said that “rational real estate loan demand has been satisfied,” with real estate loans by Chinese banking sector financial institutions seeing year-on-year growth of 8.2% at the end of October.

CBIRC data indicates that over 90% of personal home loans are used to support first home purchases, and that loans for investment in the residential leasing market have grown 61.5% YoY.

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